Aquaculture: Realities and Potentials When Getting Started

By Marley Beem, Oklahoma State University and published by the Southern Regional Agricultural Center and the Texas Aquaculture Extension Service - The outlook for aquaculture in this country is bright. Health-conscious consumers are increasing their consumption of fish and shellfish, and ocean fish catches are declining and are subject tocontamination scares. Thus, there is an increased demand for farm-raised fish.

Aquaculture: Realities and Potentials When Getting Started - By Marley Beem, Oklahoma State University and published by the Southern Regional Agricultural Center and the Texas Aquaculture Extension Service - The outlook for aquaculture in this country is bright. Health-conscious consumers are increasing their consumption of fish and shellfish, and ocean fish catches are declining and are subject to
contamination scares. Thus, there is an increased demand for farm-raised fish.

Southern states have a long growing
season and other resources
that have contributed to the establishment
of large catfish, baitfish
and crawfish aquaculture industries.
While prospects for fish
farming in the South in general
are very good, the potential for
individual success varies widely.

This publication is designed to
help individuals interested in
aquaculture gain a better understanding
of the challenges
involved in establishing a successful
fish farm. Although most
information here applies to traditional
freshwater aquaculture,
readers interested in marine culture
systems and specialty type
aquaculture will be able to glean
useful information. A glossary,
included at the end, defines many
industry terms.

Is fish farming for you?

Operating a fish farm is similar to
operating a cattle feedlot. Closely
packed and heavily fed fish must
be watched closely to detect problems
early before they turn into
disasters. This is difficult because
fish cannot be readily seen. New
fish farmers may feel like they are
working blindfolded and without
sleep until they become comfortable
using water quality test
equipment, water color changes
and feeding response as their
eyes to detect early warnings of
problems. Nighttime work is done
throughout the warm months and
includes checking dissolved oxygen
levels and running aeration
equipment as needed.

As with any other business, finding
and keeping good help also is
a challenge. Workers must be
capable of making the right decisions
when the farmer/manager
is unavailable. Also, finding and
developing good markets for the
product takes considerable time
and energy. A good fish farmer
works to earn and maintain the
trust of buyers while continuing
to search for new marketing
opportunities.
Even with good management
practices, fish farmers can still
face disasters.

Unusually hot, cold or cloudy weather can stress fish and bring on disease.

Fish can be affected by off-flavor problems that make them unmarketable for weeks or months.

Flooding and the resultant loss of fish plague many fish farms.

High feed prices and low fish prices can lead to economic losses even in years when production is good.

Because fish farming overlaps
with public issues such as wildlife
conservation, food safety and
water quality, a fish farmer must
be ready to endure a gauntlet of
regulations and permitting procedures.

Fish-eating birds are protected by federal law and can be killed in limited number only after obtaining a permit or
written permission.

Approved drugs and treatments for fish diseases are in short supply.

Many states have or are drafting laws to control water withdrawal and discharges from fish farms.

Regulations requiring water conservation
and reuse for crop irrigation
are likely to become
increasingly common for aquaculture
in the future. (Refer to
Southern Regional Aquaculture
Center [SRAC] Publication 465.)
However, in spite of the problems,
established fish farmers
enjoy a great way of life. Their
work and lifestyle are rewarding
experiences. Fish farmers enjoy a
deep sense of pride and satisfaction
as they watch their fish feeding,
growing and finally being
harvested.

Facilities that work

Although fish farming may seem
like a brand new idea, it really is
not. Decades of work by farmers
and researchers have led to the
development of proven facilities
for growing fish. As a new fish
farmer, you should keep things
simple by sticking closely to these
tried and proven designs. Control
your urge to invent until you
have several years experience in
fish farming and fully understand
all the reasons why things are
done certain ways.

The great majority of aquaculture
products in the South are produced
in levee and watershed
ponds. Other production facilities,
including cages, raceways, flow
through tanks and recirculating
systems, have not been as widely
successful for a variety of reasons.

Levee ponds are standing water
impoundments built by excavating
the pond area to a shallow
depth and using the soil obtained
to build a perimeter of levees or
dikes. The advantages of levee
ponds include the ability to harvest
by seine without draining
and the availability of oxygen all
the way to the bottom of the
pond. Disadvantages include relatively
high construction costs and
the need for a site with a slope of
less than 5 percent, soil clay content
of at least 20 percent and
wells or other reliable water
sources. Occasionally, a fish
farmer will choose a site with a
shallow water table and excavate
down into it. This should not be
done because management of
such a pond is difficult.

Levee ponds may not be fascinating,
but they are state of the art
when it comes to reliable, economical
production of catfish and
most other warmwater finfish.
Crawfish are produced in much
shallower levee pond structures.
(Refer to SRAC Publications 100,
101 and 240.)

Watershed ponds are standing
water impoundments built by
damming ravines or small valleys.
From 5 to 30 acres of watershed is
needed to supply the water for 1
surface acre of pond. Advantages
of watershed ponds include lower
construction costs than levee
ponds and the ability to make use
of steeper sites. Disadvantages
include the inability to refill
ponds at will and lack of oxygen
at greater depths, which can lead
to fish kills if a turnover occurs.
(Refer to SRAC Publication 102.)

Cages are floating enclosures in
which fish are grown and fed a
complete feed. The main advantage
of cages is that fish are cultured
in existing water bodies that
would otherwise be impractical to
harvest. Main disadvantages are
quick spread of disease and
greater vulnerability to theft,
disturbance and moderately low
oxygen levels. (See SRAC Publications
160-166.)

Raceways and flow through
tanks are long channels or tanks
through which fresh water flows
continuously and is then discarded.
Main advantages of raceways
and flow through tanks are ease
of handling and harvesting fish
and control of waste buildup by
flushing. The main disadvantage
is the shortage of sites having
abundant water of the right temperature,
that is artesian water or
water available without excessive
pumping costs. Groundwater in
the South is generally suitable for
cold water fish such as trout, but
too cold for warm water species
such as catfish. Heating water for
raceways is prohibitively expensive.

Recirculating systems are tank
systems in which water is filtered
and reused. Filtration is conducted
by large beds of bacteria,
known as biofilters. Main advantages
of recirculating systems are
that ideal growing temperatures
can be maintained year-round and
they can be located anywhere.
Main disadvantages are lack of
reliability, high production costs
and need for constant attention.
Biofilters can be killed by chemicals
that are used for disease treatments.
They also can die unexpectedly
without any apparent
reason. More research and development
work appears necessary
before recirculating systems will
be economical for most applications.
At present these systems are
being used successfully in some
hatchery systems and for broodstock
conditioning and production
of very high value species. (See
SRAC Publications 451-454.)

Location is everything

Much time, effort and money
have been wasted trying to force
fish farms to fit in impractical
locations. First and foremost, a
fish farm needs abundant, good
quality water. To raise just 1,000
pounds of catfish requires about
244,000 gallons (0.75 acre-feet) of
water. This is in a typical levee
pond that is drained once every 5
to 10 years. Raising the same
amount of catfish in a raceway
requires an enormous amount of
water-roughly 65 times as much
as in a levee pond!

Underground water from wells
and springs is preferred for fish
farming because it is free of wild
fish and parasites. Some fish
farms do use water from lakes
and creeks but problems with fish
parasites and invasion by trash
fish are a constant battle. Surface
waters also carry the threat of random
contamination by pesticides
or other harmful chemicals.

Some ground and surface waters
are totally unsuitable for fish
farming. The water source should
be tested before purchasing property
or breaking ground for construction.
The county Extension
agent or aquaculture Extension
specialist can assist in determining
how best to test the suitability
of water for fish farming.

Suitable soils and slopes are vital
for the proper, economical construction
of ponds of the type
used to produce most aquaculture
products in the South. To hold
water, soils generally need to have
20 percent or more clay content
and be free of rock outcroppings,
sand layers and other causes of
excessive seepage. Ponds built
where soils do not hold water
well often must be abandoned
because corrective measures are
costly. Levee ponds generally are
built only in areas with less than 5
percent slope; about 1/2 percent is
ideal. (See SRAC Publications 100
and 101 for more information on
levee ponds.)

Areas with more than 5 percent
slope are generally better suited
for watershed type ponds. SRAC
Publication 102 has more information
on watershed ponds. The
county Natural Resources
Conservation Service office can
assist in evaluating the suitability
of a site for pond construction.
Raceways and other production
facilities are less dependent on
soils and slopes.

Laws and regulations can prohibit
fish farms on certain sites. A site
classified as a wetland usually
cannot be developed. Feeding of
any livestock in the watershed of
a municipal water supply lake
may be prohibited. Sites close to
public waters may not be feasible
for fish farms because of concerns
about escape of fish or discharge
of water. Contact a county
Extension agent or aquaculture
Extension specialist for a list of
agencies involved in permitting
fish farms. Obviously, it is best to
investigate possible restrictions
and have permits in hand before
making a major investment in a
site.

What to grow?

Like any other business, fish
farms must produce, at a profit, a
marketable product. Fish farmers
located outside of major aquaculture
areas must work doubly hard
to be sure that their resources are
suitable for what they wish to
produce and to build their own
markets from the ground up.
Ideas for developing markets are
contained in SRAC Publication
350, Small Scale Marketing of
Aquaculture Products. In major
aquaculture areas, there are
processors and other established
markets for certain products.
Many prospective fish farmers
want to concentrate all their time
and effort on growing fish, but
often it is the marketing of their
product that determines success
or failure. This is especially true if
new markets will have to be
developed for the final product.
This has even been true for those
selling to established processing
plants. A new fish farmer must
consider what to do if the intended
processor goes bankrupt, as
many have. Consequently, plan to
spend a considerable amount of
time and energy developing primary
and secondary markets for
products, and be ready for all possibilities.

Catfish are the major aquaculture
product in the South. Production
is centered in Mississippi,
Arkansas, Alabama and
Louisiana, although smaller
industries exist in most other
southern states. Catfish production
is divided into fingerling production
and food fish production.
Many producers specialize in one
or the other. Key requirements for
levee pond catfish farms include
25 gallons per minute of water for
each surface acre of pond and
land suitable for levee ponds as
described in the previous section.
The investment needed ranges
from $3,000 to $5,000 per surface
acre, excluding land costs. Key
land and water requirements for
watershed pond catfish farms
include those listed for watershed
ponds in the previous section. The
investment needed ranges from
$2,000 to $4,000 per surface acre,
excluding land costs. (Refer to
SRAC Publications 180 and 181
and video V001 as well as catfish
farming fact sheets available in
your state.)

Crawfish production is centered
in Louisiana and eastern Texas,
although there are small farms
scattered throughout the South.
The red swamp and white river
species of crawfish are the most
commonly cultured. Key requirements
for these and other burrowing
species include heavy clay
soils and 70 to 100 gallons per
minute of water per surface acre
of pond. Flat sites are needed to
allow economical pond construction.
The hand labor needed to
empty and reset traps daily during
the harvest season may be difficult
to obtain outside of major
crawfish production areas. An
investment of approximately
$90,000 is required for a 40-acre
crawfish farm, excluding land
costs. (Refer to SRAC Publications
240-242 and video V003.)

Baitfish production consists
mainly of golden shiners and
smaller amounts of fathead minnows
and goldfish. Arkansas
dominates baitfish production.
Key requirements include a site
suitable for levee ponds and 20 or
more gallons of water per minute
per surface acre. The investment
required for a 160-acre baitfish
farm is $720,000. (See SRAC
Publications 120-122 and video
V019.)

Largemouth bass, bluegill and
other sport fish fingerlings are
widely produced for stocking
recreational fishing ponds. Key
requirements include land and
water resources suitable for levee
or watershed ponds. Special skills
are required to handle, protect
and provide food for very young
fish. Experience in producing
large fish is usually obtained
before the production of fingerlings
is attempted. (See SRAC
Publications 140-142, 200 and
201.)

Rainbow trout farming in the
South centers in the Smoky
Mountains of North Carolina,
Tennessee and northern Georgia
where water from mountain
streams is diverted to flow
through concrete raceways and
tanks. A small farm is considered
to be one with a water flow of 500
gallons per minute. The establishment
cost required for such a
small farm is approximately
$26,000 excluding land costs. (See
SRAC Publications 220-223 and
V005.)

Striped bass, hybrid striped bass
and red drum for food are newly
developing species for fish culture.
Farms are concentrated
along coastal areas. Levee pond
culture predominates with some
interest in flow through and recirculating
systems. Water should
have an alkalinity of 100 mg/l or
more. ( See SRAC Publications
300-303, 320-324 and videos V006
and V002.)

Tropical aquarium fish for the pet
market are raised mainly in
Florida because of the favorable
climate. Both small earthen ponds
and recirculating systems are
used. The conditions required to
spawn and rear tropical aquarium
fish can be difficult to provide.
Requirements vary from species
to species and information may be
difficult to obtain.
Other species may be feasible for
individual situations. Some
species, however, may never be
developed beyond the experimental
stage. Many types of fish and
shellfish are uneconomical or
impossible to produce because of
lack of proven feeds or fingerling
rearing techniques or other technical
problems. Tried and proven
forms of fish farming are the best
methods for beginners. There is
no easy money to be made in
aquaculture. If someone offers
something that sounds too good
to be true, it probably is.

Reasons to start small

Big mistakes are expensive. There is
little use for facilities built the
wrong way or on the wrong site.
The most common examples are
ponds that will not hold water or
cannot be drained.

More time is available to develop
markets and learn what your customers
need. You may find a more
profitable market than you had
originally planned and need to
change your way of growing and
harvesting to fit this new market.

Design of ponds and facilities can be
improved. Changes in pond size or
other structures can be made easily
when expanding.

Fish farming may not be to your liking.
The labor or management
required may not be what you
had expected.

Water quality management

The most important factor in
aquaculture is water quality.
Dissolved oxygen levels in water
can drop quickly and suffocate
fish. Wastes produced by fish can
build up, harm their delicate gills
and lead to other problems. Fish
farmers can deal with these dangers,
but only after they have
learned how to use water quality
test equipment. The Cooperative
Extension Service in most southern
states offers water quality
workshops for fish farmers. These
workshops provide hands-on
experience using test equipment,
and teach what the water quality
numbers mean and what management
actions to take. (See SRAC
Publications 370, 371 and 462-
464.)

New fish farmers who delay buying
and learning to use test equipment
often believe the warnings
do not apply to them. Then suddenly
they discover an entire
pond of dead or sick fish (Figure
1). Producers who take the time to
check oxygen, ammonia, nitrite
and other water quality factors on
a regular basis find that it pays off
by greatly reducing fish kills and
disease problems.

Do your homework

As you make plans, you will find
it to your advantage to ask some
hard questions. Find out if your
ideas make good technical and
economic sense by talking with a
wide range of people. This
includes potential customers,
Extension specialists, Natural
Resources Conservation Service
professionals, businessmen and
others. Visit as many fish farms as
you can. Keep an open mind but
remember that some fish farmers
have pet theories and ideas that
may or may not apply to your situation.

Following are some questions that
must be asked before a major
investment in a fish farm is made.

Production technology

Is the species you plan to produce being profitably produced on commercial farms or is it still in the experimental stage of development? Be skeptical of claims of recent breakthroughs.

Has the proposed production facility design been proven through widespread profitable use or is it an experimental system? Experimental species or production systems may be more interesting, but few individuals can afford to risk the money needed for such research.

Physical resources

Does the proposed site have the right soil, slope, water and road access conditions for the type of production facility to be built?

Is there a better type of production facility for this site?

Is the proposed site only marginally suitable? If so, consider other sites before committing yourself.

Is it feasible to obtain needed permits for the proposed site and type of production system? Some sites may be located in or close to highly regulated resources such as public water supply lakes or sensitive wildlife habitat areas.

Marketing

Who are your planned customers?

How much will they buy from
you, how frequently and at
what price?

What are their preferences/
demands in product size, form,
uniformity and other factors?

Is the market already saturated?

Who is the competition and
how will you compete against
them? Get a realistic picture of
your strengths and weaknesses
by looking at the situation from
the customer's point of view.

Seedstock, feed and specialized
supplies

How will you obtain a reliable
supply of fingerlings or other
seedstock at a reasonable price?

Can you afford the extra investment
in time and money needed
to develop your own seedstock
production capacity?

Is there a proven, economical
feed available for the species
you plan to produce?

Do you have a reliable, affordable
source for other specialized
supplies and equipment?

Financial factors

What is your strategy for
obtaining funding? A formal
business plan should be prepared
any time a major investment
is planned. The county
Extension agent should be able
to provide fact sheets or other
assistance in preparing business
plans. (Also see SRAC
Publication 381.)

Are there other ways that the
money could be invested for
greater return at less risk and
equal personal satisfaction?

Can your financial situation
support a new fish farm that
will suffer a loss or only break
even the first several years of
operation?

Personal factors

Can your personal situation
stand the extra stress of starting
a new enterprise?

Do you and/or your employees
have the skills needed to
make the proposed operation
work? Consider management
skills as well as mechanical and
farming skills needed.

Would you hire yourself to do
the planning, management and
day to day labor required? Be
honest with yourself about
your strengths and weaknesses.

Planning for the unexpected

How will you minimize or
cope with construction delays
caused by bad weather, slow
acquisition of government permits,
lack of specialized equipment
or other bottlenecks?
Hope for the best but be prepared
for the worst.

Think like a banker

Take the plunge into aquaculture
only after careful planning.
Sample enterprise budgets that
are available through the
Cooperative Extension Service are
a good starting point. Read them
carefully and make all changes
needed to fit your situation.
Other financial statements
required for business proposals
are discussed in SRAC Publication
381.

Raising nontraditional species
will require an original budget.
First, consider the income your
fish farming operation will produce.
Generally this means estimating
the amount of fish you
will produce and the price you
will receive for them. Next, make
a list of the expendable items you
will need to buy each year to produce
your fish. This will include
feed, fingerlings, labor, fuel, electricity,
equipment repair, interest
on borrowed money, etc. These
are your variable costs.

Finally, make a list of costs for
everything associated with
machinery. These are your fixed
costs. Examples include pond construction,
wells, pumps, trucks,
feed bins, tractors, aerators and
buildings. Do not overlook the
cost of buildings, tractors or other
equipment that are already purchased.

Part of their costs should
be charged off each year of their
expected life, as they eventually
will need to be replaced. Equipment
also used for other jobs on
the farm should be partially
charged so each enterprise can
stand on its own. For example, a
tractor that is used 20 percent of
the time for fish farming would
show up on the list as 0.20 tractors.
A major reason to estimate income
and expenses is to be able to project
your return or profit. Another
use of the same numbers is to project
a break-even cost for what
you produce. To obtain these critical
numbers, organize the information
into an enterprise budget
format. The numbers already are
divided into three lists: income,
variable costs and fixed costs.
Now put these numbers into four
columns: item, quantity, dollars
per unit ($/unit) and total as
shown in Figure 2. Do not forget
to include any charges for interest
if variable or fixed costs are
financed.

Do not get discouraged if the estimated
return is tiny or even negative.
The first budget is just a
starting point. Consider ways to
reduce costs. For example, doing
your own pond construction work
with used equipment may reduce
pond construction costs by half.
Another way to reduce costs
would be to use your own funds
instead of borrowing.

A third way to reduce costs would
be to expand. This is often the
only way to earn a profit when
selling to high volume, low price
buyers such as processing plants.
Try developing budgets for different
size fish farming operations to
determine how large your opera
tion must be in order to reach different
income levels.

Managers of small operations
generally need to seek out buyers
other than processing plants in
order to operate profitably. SRAC
Publication 350 discusses many of
these alternatives. Be creative-
time spent finding and developing
specialty markets can yield
good returns.

For non-farmers

Most of today's farmers were
born and raised on farms. Very
few farmers learned how to farm
as adults. As a non-farmer, this
puts you at a considerable disadvantage.
You will need to go
through a period of on-the-job
training. Are you the kind of person
who does most of the maintenance
and repair work? Can you
put up with outdoor work during
bad weather and odd hours? If so,
great-these are skills and tolerances
you will need on a fish
farm. If not, you may wish to
reconsider the vocation of fish
farming.

Agriculture has never been an
easy way to make a living. Far
from leading a peaceful, worryfree
life, farmers often face weather
problems, low market prices,
crop losses to diseases, and long
working hours. Farming today
requires much more than just
being able to produce a crop.
Successful farmers must have a
sound understanding of the economics
of their operation, keep
good records and work to develop
the best markets for their
product.

The bottom line

Commercial aquaculture involves
all the struggles that go with any
form of farming. In addition to
these, fish farmers must plan carefully
to make sure that their production
facility is based on a tried
and proven design, the site conditions
are right, and reliable markets
exist or can be developed.
In return for their efforts, fish
farmers enjoy an independent,
countryside lifestyle and can
expect to receive a reasonable
return on investment, similar to
many other forms of agriculture.

Further information and
assistance

County Extension offices are likely
to offer the SRAC publications
listed, as well as other fact sheets
tailored to fish farming conditions
in your state. County agricultural
Extension agents, especially those
in major aquaculture regions, are
increasingly likely to be knowledgeable
about opportunities for
aquaculture in your area. Also,
most southern states have aquaculture
Extension specialists who
are accessible through the
Extension office.

The county Natural Resources
Conservation Service offices offer
free pond planning and layout
services based on expert knowledge
of local soil conditions. The
pond specifications they provide
can help ensure that fish farming
ponds are built properly.

Glossary

Aquaculture - The production
and sale of farm-raised aquatic
plants and animals.Bacteria - Microscopic animal life,
some kinds of which are responsible
for the decay of dead materials
and wastes.Biofilters - Plates, beads or other
media that provide a large surface
area upon which bacteria can
grow using fish waste products as
food. The bacteria break down
ammonia and nitrite into forms
much less harmful to fish. A component
of recirculating systems.Dissolved oxygen - Oxygen dissolves
poorly in water and is often
in short supply for aquatic animals.
Warm water holds even less
oxygen than cold water.Fingerlings - Young fish from 1
inch in length up to 1 year of age.
This stage comes after the fry
stage.Fry - Young fish from the time of
hatching up to 1 inch in length.Levee ponds - Standing water
impoundments built by excavating
the pond area to a shallow
depth and using the soil obtained
to build a perimeter of levees or
dikes. These should be built so
they can be drained by gravity.Off-flavor - Aquatic animals can
absorb and take on bad flavors
from the water in which they live.
These musty, muddy or otherwise
undesirable flavors usually come
from substances put out by certain
species of microscopic plants
(phytoplankton).Raceways - Long channels
through which large amounts of
new water flow continuously and
are then discarded. Usually built
of concrete, these also can be
earthen channels or long tanks
constructed of other materials.
Recirculating systems - Tank systems
that rely on biofilters to
break down harmful fish waste
products so water can be reused.Seine - A long net used to capture
fish.Turnover - Mixing of top and bottom
water than can lead to fish
kills, especially in watershed
ponds. During summer, a cold
bottom layer of water lacking in
oxygen develops. In fall, the bottom
and top layers can suddenly
mix or turn over.Watershed ponds - Impoundments
built by damming streams
or small valleys. Runoff from the
surrounding watershed fills the
ponds.Water quality - The degree of
suitability of water for growing
fish and other aquatic organisms.
Water high in dissolved oxygen
and low in animal wastes such as
ammonia is generally considered
to be of high quality. Other factors,
such as alkalinity, chlorides
and harmful substances like iron
and hydrogen sulfide, also affect
quality. Water quality can change
quickly in fish farming situations
and must be checked regularly on
site.